Frequently Asked Questions

General

GEN 00001Published On: 10/18/2012

Question: Is the Legal Representative (designated in Section 1.4 of the Part 1 Application) responsible only for the receipt and forwarding of legal process? Are there any other duties that must be performed? Is the Legal Representative responsible in any way for the Applicant’s activities? Can a corporation be designated as the Legal Representative, as opposed to an individual?

Answer: The responsibility of the Legal Representative from the perspective of the FE-PA Companies is to accept service of process on behalf of the Applicant. This designation is required so that the Companies may appropriately direct any legal communications. Designation as an Applicant's Legal Representative is not intended to create a responsibility in any individual for the Applicant's activities where that responsibility would not otherwise exist. An individual must be designated, not merely a corporation.

GEN 00003 (revised 07/07/2014)Published On: 11/01/2012

Question: Does MW/tranche multiplied by # of tranches represent the total MW (estimated) to be procured?

Answer: A tranche represents a fixed percentage of a company’s class load. Forecasted company peak loads were used to set the number of tranches, and the resulting tranche size percentages. The MW/tranche size is an estimate. The number of tranches will stay constant during the delivery period regardless of the actual peak or hourly load data. Suppliers are responsible for serving the actual load, which reflects various factors including but not limited to time of year and day, weather, and customer shopping migration.

GEN 00004 (revised 10/10/2014)Published On: 11/07/2012

Question: If applying the load cap to the total number of tranches to be procured in a given auction across all products results in a fraction, will the load cap be rounded down to the nearest integer?

Answer: If application of the load cap would result in fractional tranches, then rounding down to the nearest integer tranche is used. Note that the load cap is applied in each auction. For example, if there are 72 tranches being procured in the Residential/Commercial (Fixed-Price or FP) auction, a load cap of 50% means no bidder will be allowed to bid on more than 36 tranches in that auction. If there are 37 tranches being procured in the Industrial (Hourly-Priced or HP) auction, applying a 50% load cap results in 18.5 tranches, and rounding down to the nearest integer tranche means no bidder will be allowed to bid on more than 18 tranches in that auction.

GEN 00006 (revised 11/06/2014)Published On: 11/07/2012

Question: Is it anticipated that the auction will start and close on the same day?

Answer: There is no set time-frame for how long any particular auction will take. Generally, however, most Pennsylvania auctions are concluded in a single day.

GEN 00007 (revised 11/06/2014)Published On: 11/14/2012

Question: For the Part 1 Application, are hardcopies required for all of the supporting documents (i.e., PJM and financial documents)?

Answer: Hardcopies of Part 1 and Part 2 Application documents are not required, electronic versions are sufficient. Hardcopies are required for Letters of Credit only.

GEN 00008 (revised 11/06/2014)Published On: 11/14/2012

Question: We do not have a legal counsel that resides in Pennsylvania, and all legal documents are handled by our headquarters in another state. Will this be acceptable?

Answer: No. All bidders are required to provide the name of a legal contact that has an address within the Commonwealth of Pennsylvania.

GEN 00009 (revised 11/06/2014)Published On: 11/15/2012

Question: In FAQ GEN 00001, it is stated that for the Legal Representative, “An individual must be designated, not merely a corporation.” We utilize a large Service of Process agent and they have told us that they cannot name a specific individual, and that naming an individual applies only to individuals who act as the registered agent. This would not apply to a service company which acts as a corporate registered agent. In addition, service of process is valid only if received by mail, certified mail, FedEx, or process server. We do not accept process via fax or email. To clarify that, the State statutes and administrative rules mandate how service can be accepted.

Answer: All bidders are required to provide the name of an individual to be designated as their legal contact. Please also see GEN 00008.

GEN 00010 (revised 10/10/2014)Published On: 11/20/2012

Question: What are the consequences of any one or all of the EDCs being downgraded below investment grade or not being rated by any rating agency?

Answer: The Supplier Master Agreement (SMA) does not address the possibility of a downgrade of an EDC. Each supplier should make its own determinations of the likelihood and effect, if any, of such an occurrence.

GEN 00012Published On: 12/07/2012

Question: Regarding Section 1.6 of the Part 1 Application, what documents count as documentation that our company has PJM E-Accounts set up and that we are a registered PJM LSE?

Answer: As proof of having a PJM E-Account, we accept screenshots of your logged-in E-Account or a Customer Account Manager Designation Form. Proof of being a registered Load Serving Entity (LSE) in PJM can be a fully executed PJM Application for Membership, a copy of the Operating Agreement of PJM showing your company name listed in the PJM Member List in that Agreement, or a screenshot from the PJM Website listing its members and showing the name of your company.

GEN 00013 (revised 11/06/2014)Published On: 12/07/2012

Question: Please explain the differing renewable requirements for West Penn Power versus the three other EDCs. Please explain in detail how the AECs for West Penn Power are allocated.

Answer: The obligations of Default Service Suppliers to provide Alternative Energy Credits (AECs) vary among the Companies. Each supplier to Met-Ed, Penelec and Penn Power must provide non-solar Tier I and Tier II AECs to meet the requirements of the Alternative Energy Portfolio Standards Act (AEPS) for the load it serves, but those Companies will satisfy all Tier I solar AEPS requirements associated with their Default Service load using solar AECs obtained through separate procurements. Each supplier to West Penn Power will be required to provide all Tier I (including solar) and Tier II AECs associated with AEPS requirements for the default service load served by the supplier, less a specified number of Tier I solar AECs and Tier I non-solar AECs obtained by West Penn Power under separate long-term contracts. West Penn Power will allocate a defined number of Tier I solar and Tier I non-solar AECs for each tranche of load served that will be applied to reduce each supplier’s AEPS obligations. The obligation provisions resulted from the Commission Order at Dockets No. P-2013-2391368, P-2013-2391372, P-2013-2391375, P-2013-2391378. Please also see GEN 00014.

GEN 00014 (revised 09/21/2016)Published On: 12/07/2012

Question: For West Penn Power, what portion of the 1,000 Solar and 75,000 Tier I Alternative Energy Credits (AECs) will be allocated to Default Service Suppliers for this procurement?

Answer: FAQ GEN 00013 explains the allocation of AECs for West Penn Power. The table below provides more details on how 1,000 Solar Photovoltaic Alternative Energy Credits (SPAECs) and 75,000 Tier I AECs per year are allocated to Default Service Suppliers by customer class:

DSP-III

Residential

Commercial

Industrial

Total

Percentage

36%

24%

40%

100.0%

Tranches per Class

28

18

13

SPAECs/Tranche

14

12

30

Tier I AECs /Tranche

968

1012

2,283

Total Allocated SPAECS

392

216

390

998

Total Allocated Tier I

27,104

18,216

29,679

74,999

DSP-IV

Residential

Commercial

Industrial

Total

Percentage

33%

25%

42%

100.0%

Tranches per Class

28

19

13

SPAECs/Tranche

10

12

37

Tier I AECs /Tranche

880

968

2,459

Total Allocated SPAECS

280

228

481

989

Total Allocated Tier I

24,640

18,392

31,967

74,999

GEN 00016 (revised 09/21/2016)Published On: 12/13/2012

Question: Please list the items that are excluded from the Default Service Suppliers’ full requirements obligation.

Answer: The full requirements obligations of Default Service Suppliers exclude the following items:

Regional Transmission Expansion Plan charges ("RTEP");

PJM Expansion Cost Recovery Charges ("ECRC");

Reliability Must Run / Generation Deactivation charges ("RMR") associated with generating plants for which specific RMR charges begin after the approval of the Companies' DSP-III Default Service Plans by the Commission. All Suppliers will continue to be responsible for RMR charges associated with generating plants that began before the approval of DSP-III by the Commission, as those charges may change over time;

A listing of PJM billing line items, and the responsible party for each under the Default Service Supply Master Agreement, can be found in Appendix D of the Supplier Master Agreement (SMA).

GEN 00017Published On: 12/13/2012

Question: In the Part 2 Application, the indicative offer includes the number of tranches and does not include indicative offer prices, is that correct?

Answer: Yes, that is correct. Applicants do not specify prices in their indicative offers -- at the time indicative offers need to be provided by applicants, the prices already will have been specified as the minimum and maximum possible starting prices in the auction. For each product, the indicative offer comprises two numbers: the first number is the maximum number of tranches the applicant is willing and able to bid on and serve at the minimum starting price for the product, and the second number is the maximum number of tranches the applicant is willing and able to bid on and serve at the maximum starting price for the product.

GEN 00018 (revised 10/10/2014)Published On: 12/13/2012

Question: Will the pre-bid security be returned to the bidder in the event the bidder does not participate in the auction or is not awarded any tranches?

Answer: The pre-bid security will be returned to the bidder as explained in the Bidding Rules.

GEN 00019Published On: 12/13/2012

Question: How frequently are the FAQs updated?

Answer: Some questions can be answered and posted as FAQs within 24 hours. Other questions require more time to answer. Questions are answered and FAQs are posted in as timely a manner as possible.

GEN 00021 (revised 09/21/2016)Published On: 12/14/2012

Question: According to the Bidding Rules, the Residential load Default Service supplier will be paid a fixed price for 95% of the residential load and 5% of the residential load will be priced at Real Time LMP plus a $20/MWh adder. The Commercial load Default Service supplier will be paid 100% fixed price, and the Industrial load Default Service supplier will be paid the sum of 100% of the fixed price and 100% of the Real Time LMP plus a $4/MWh adder. To confirm this, are the following calculations correct?

Example: Assume auction price is $100/MWh for all customer classes, volume is 10 MW at a certain date/hour for all customer classes, and RT LMP for that date/hour is $50/MWh for all customer classes.

Answer: That example is correct, except in DSP-III there is also a seasonal billing factor that is applied to the fixed price portion of the calculation for the Residential and Commercial products. There is no seasonal billing factor in DSP-IV auctions.

GEN 00022 (revised 09/22/2016)Published On: 01/03/2013

Question: This inquiry is regarding smart meter installation/implementation. Did all the FirstEnergy utilities complete smart meter installation for all customers? If so, are you using smart meter information (no more profile) to allocate customer capacity/transmission peak? If not, what is the current status, and when do you expect to use smart meter information to allocate customer capacity/transmission peak?

Answer: No, the PA utilities have not completed smart meter installation for their customers. Deployment of smart meters will continue through mid-2019 for 98.5% of all customers per the Commission- approved smart meter deployment plan. The remaining 1.5% of the meters that may require alternative communication solutions or involve hard-to-access locations are expected to be installed by December 31, 2022, pursuant to the Joint Petition of Metropolitan Edison Company, Pennsylvania Electric Company, Pennsylvania Power Company, and West Penn Power Company For Approval of their Smart Meter Deployment Plan, Docket Nos., M-2013-2341993, M-2013-234199, M-2013-2341990, and M-2013-2341994 (Order entered June 25, 2014).

As of June 30, 2016, approximately 463,000 meters along with related infrastructure have been deployed based on the following Company breakdown:

Meters

Met-Ed

35,520

Penelec

157,140

Penn Power

171,750

West Penn Power

98,800

Total

463,210

The Companies anticipate the majority of Penn Power smart meters will be certified and operational before the end of the first quarter 2017. Smart meters in the remaining Companies’ service territories that were deployed throughout 2016 will commence with a certification process on a meter reading unit by meter reading unit (or route by route) basis over several months following first quarter 2017. After the first quarter of 2017, interval data will be accessible for those customers with smart meters.

GEN 00025 (revised 09/21/2016)Published On: 01/08/2013

Question: If a successful Part 1 Application and Part 2 Application were submitted and approved for a prior auction under one of FirstEnergy’s Pennsylvania Default Service Programs (DSP), does a Part 1 Application need to be submitted for subsequent auctions under any DSP?

Answer: During the process leading up to an auction, we will inform Qualified Bidders from the most recent auction(s) whether a new Part 1 Application will be required for the upcoming auction. As a general rule, prospective bidders will need to complete one new Part 1 Application per calendar year, unless the prospective bidder needs or wants to make changes to their Part 1 Application. The Qualified Bidder still needs to complete a separate Part 2 Application for each auction. In any case, a prospective bidder is obligated to inform the Independent Evaluator of any change in its status related to the information the prospective bidder previously provided in its Part 1 Application or its Part 2 Application. A new Part 1 Application is required of all prospective bidders for the first auction in a DSP series of auctions.

GEN 00027Published On: 01/10/2013

Question: Do all customers in a given group (for example Met-Ed Residential Default Service customers) pay the same rate? If not, please provide the rate translation mechanism from all the auction clearing prices (inclusive of the floating LMP-based portion) to what different types of customers within a group would pay.

Answer: All customers within the Residential Class and the Commercial Class of each Company pay the same rate. The Industrial Class customers on hourly rates pay the same rate for kWh's consumed in the same hour.

GEN 00031 (revised 01/18/2017)Published On: 01/22/2013

Question: (1) Have any of the EDCs filed to adjust the Network Integration Transmission Service (NITS) rate? If so, what are the expected changes? (2) Do you expect any of the EDCs to file during the term of the products in the Default Service auctions (e.g., now through and until May 2015)? (3) If so, what are the expected changes? (4) When will Pennsylvania Power Company (Penn Power) update its formula rate? What variables are expected to change? What would be the expected impact to both the Bulk and Area NITS rate?

Answer: On October 31, 2014, PJM, on behalf of American Transmission System, Incorporated (“ATSI”), filed with the Federal Energy Regulatory Commission (“FERC”) a proposed update to ATSI’s formula rate with a requested effective date of 1/1/2015. FERC approved a settlement in this case on October 29, 2015. This affects Default Service and EGS LSEs serving load in Penn Power as of 1/1/2015 as well as potential bidders of future Penn Power Default Service Auctions. For more information, please see the filing and additional information posted on the FERC Website pertaining to Docket No. ER15-303-000. The ATSI NITS rate will be updated every January 1st per ATSI’s new formula rate.

Having received approval from the PA Commission to transfer the transmission assets of Met-Ed and Penelec to MAIT, a future filing proposing to revise NITS rates to formula style rates for the Met-Ed and Penelec zones is anticipated.

GEN 00034 (revised 09/21/2016)Published On: 02/05/2013

Question: Can a winning bidder publicly disclose the number of tranches they won in an auction?

Answer: In both the DSP-III and DSP-IV Bidding Rules, Section 11.3.4, Limitations on Disclosures by Bidders, states: "Bidders are not allowed to disclose they are participating in the Fixed-Price Auction or the Hourly-Priced Auction, and winning bidders are not allowed to disclose that they have won any tranches in the Fixed-Price Auction or the Hourly-Priced Auction until the Commission publicly reports the results of the auction. Such limitation on public disclosure by bidders is waived if disclosure is required by law."

GEN 00035Published On: 11/26/2013

Question: Regarding section 1.4 of the Part 1 Application for Default Service products for Met-Ed, et al: does the applicant's legal representative in PA have to be an attorney or will the corporation's agent for service of process suffice?

Answer: An agent for service of process will suffice. See also FAQ GEN 00001 and FAQ GEN 00009.

GEN 00036Published On: 12/11/2013

Question: The Independent Evaluator and the Pennsylvania PUC publish the winning auction prices of prior auctions. Are the names of the winning suppliers made public?

Answer: The names of winning bidders are not made public. As noted in FAQ GEN 00034, a winning supplier is free to disclose that they have won tranches in an auction but only after the Commission has publicly reported the results of the auction.

GEN 00039 (revised 01/18/2017)Published On: 01/07/2014

Question: What is the percentage of interval-metered installations for various customer classes, say, Residential, Commercial, and Industrial for each of the EDCs (Met-Ed, Penelec, Penn Power, and West Penn Power)? Is there a plan to install more interval-meters within the EDCs' territories and if so what is the planned timeline for the installation?

Answer: Interval meters are currently installed on C&I customers with demands of 400 kW or greater.

Percent Customers with Interval Meters

Res

C&I

Met-Ed

0.00%

1.48%

Penelec

0.00%

1.57%

Penn Power

0.00%

1.29%

West Penn Power

0.00%

1.86%

The percentage of customers with interval meters stated above does not include any smart meters installed to date because the Companies are not currently collecting interval data from these meters. See GEN 00022 for the Smart Meter installation status.

GEN 00040 (revised 01/18/2017)Published On: 01/10/2014

Question: What is the exact tranche size per EDC per customer class? For example, if for a particular Default Service auction there were 12 tranches of Met-Ed Residential load that totaled 43%. Would the calculation be 0.43/12 so that each tranche = 3.583% or would this 43% be a rounded number reflecting a total number of 28 tranches, so that the actual tranche size was 1/28, or 3.5714%? Please clarify.

Answer: The 12 tranches would represent approximately 43% rounded. The actual size of each tranche would be 1/28, or 3.5714% (using four decimal places of precision here).

GEN 00042 (revised 09/21/2016)Published On: 07/28/2014

Question: Have the documents changed at all for the upcoming Auction other than as referenced per the date noted at http://www.fepaauction.com/Documents/SupplierDocuments.aspx?

Answer: The documents on that Web page have been updated as of the date shown under “Updated On”. The Part 1 Application and Part 2 Application on that Web page are updated as necessary to reflect the products that are being offered in the upcoming auction.

GEN 00043 (revised 09/21/2016)Published On: 09/02/2014

Question: In the DSP-III process, are Default Service suppliers responsible for RMR charges and how are these charges different from DSP-II?

Answer: DSP-III and DSP-IV Default Service suppliers are not responsible for PJM charges associated with reliability must run (“RMR”) unit declarations and deactivation charges of plants for which charges are set after the approval of DSP-III by the Commission (July 24, 2014). RMR unit declarations and deactivation charges of plants for which charges were set before July 24, 2014, and continue during the DSP-III and/or DSP-IV term, are the responsibility of the Default Service suppliers in the relevant DSP. Please also see GEN 00016.

GEN 00044 (revised 11/06/2014)Published On: 09/09/2014

Question: Will the FE-PA Utilities provide the awarded ARR paths (or nominated FTR paths) and values for PY14/15 that will be allocated to Default Service Suppliers?

Answer: The Default Service Suppliers independently participate in the PJM ARR/FTR auctions and are awarded ARRs and FTRs from the PJM auction into their individual PJM account. The FE-PA Utilities do not have access to the awarded ARR paths or nominated FTR paths for any Default Service Supplier.

GEN 00045 (revised 12/03/2015)Published On: 09/10/2014

Question: For the ARRs that are allocated to suppliers, what percent, if any, of the MWs are converted to FTRs?

Answer: Please refer to FAQ GEN 00044. Also, note that when customers move among suppliers, PJM allocates ARRs among the suppliers in accordance with the PJM Tariff. FTRs are not transferred from supplier to supplier.

GEN 00046 (revised 09/21/2016)Published On: 09/11/2014

Question: If the Part 1 Application is submitted electronically, is it necessary to submit hardcopies of any part of the Part 1 Application and/or supporting documents?

Answer: Applicants are not required to submit hardcopies of any part of the Part 1 Application and/or supporting documents.

GEN 00048 (revised 09/21/2016)Published On: 10/03/2014

Question: Is a Letter of Intent to Provide a Guaranty required for participation in DSP-III or DSP-IV Default Service Auctions?

Answer: In some cases for the prior DSP-II Default Service Auctions, a Letter of Intent to Provide a Guaranty was required. However, for the DSP-III and DSP-IV Default Service Auctions there is no Additional Pre-Bid Security required, and therefore no need for a Letter of Intent to Provide a Guaranty.

GEN 00050 (revised 09/21/2016)Published On: 10/23/2014

Question: Would you please make available a Word document version of the Form of Guaranty?

Answer: Rather than a Word version, a PDF version of the Form of Guaranty is available on the "Supplier Documents" page of the Information Website. This version contains form fields that can be filled in electronically.

GEN 00052Published On: 10/30/2014

Question: Could you provide the methodology for how the total APS zone capacity obligation is allocated between Allegheny Maryland (Potomac Edison) and West Penn Power?

Answer: Each state jurisdiction within the APS Zone is metered at the state line crossings. This includes MonPower WVA, Potomac Edison WVA, Potomac Edison Maryland, ODEC VA, and West Penn Power PA. The state jurisdiction loads at the time of the PJM five summer peaks are determined from the metered loads which sum to the APS Zone load at the time of the five PJM peaks. A load ratio share is then determined based on each state jurisdiction average 5 CP compared to the total APS Zone average 5 CP. This load ratio share is then applied to the PJM assigned capacity obligation for the APS Zone to determine each state's capacity obligation.

GEN 00055 (revised 09/21/2016)Published On: 01/08/2015

Question: Appendix D of the Default Service Supplier Master Agreement distinguishes "Generation Deactivation and RMR Generating Unit Declarations" (billing line item 1930) before PaPUC Approval of the Company's Default Service Program as the responsibility of the DS Supplier (winning bidder) and after PaPUC Approval of the Company's Default Service Program as the responsibility of the EDC. Would you provide the date of the approval of the Company's Default Service program, as well as indicate where on PJM's Website information regarding the dates of Generation Deactivation and RMR Generating Unit Declarations can be found?

Question: For West Penn Power: (1) What is the on-going rate for the PJM charge of "Transmission Owner Scheduling, System Control and Dispatch Service"? (2) Which transmission owner is providing transmission service to West Penn Power?

Answer: (1) There is no "Transmission Owner Scheduling, System Control and Dispatch Service" charge for West Penn Power under Schedule 1A of the PJM OATT. APS (West Penn, Monongohela Power, and Potomac Edison) waived these charges as part of their agreement to join PJM in 2002.
(2) West Penn Power Company d/b/a Allegheny Power is the transmission owner providing service to West Penn Power.

GEN 00058 (revised 01/18/2017)Published On: 03/25/2015

Question: There are two rates - one for a 365-Day Year and one for a 366-Day Year. The NITS rate for FirstEnergy (Met-Ed and Penelec) is $15,112/MW-Year, so I see how the rates in $/MW-Day are arrived at. However, looking at Section 5.2 of Manual 27 for PJM, it mentions only dividing the Annual Zonal Network Integration Transmission Service Rate by 365. Given that 2016 is a leap year, will the rate be $41.289617/MWd or will the PJM rule apply and it will be $41.402740/MWd?

Answer: The Penelec and Met-Ed NITS rate for 2016 will be 41.289617, which is based on the 366 calendar days in a leap year.

GEN 00059 (revised 10/20/2017)Published On: 05/11/2015

Question: The Allegheny (West Penn Power), Met-Ed, and Penelec NITS rates have not changed since before June 2012. Are there any plans for the operating companies to update their NITS rates in the foreseeable future?

Answer: Allegheny (West Penn Power) has not filed changes to its NITS rate. On July 21, 2016, Met-Ed and Penelec received approval from the PaPUC to transfer their transmission assets to Mid-Atlantic Interstate Transmission, LLC (MAIT). On October 28, 2016, a FERC filing was made by MAIT (Docket # ER17-211-000) that may impact the NITS rates in the Met-Ed and Penelec zones. If approved, the rates would change as follows:

NITS Rates

Current NITS Rate

Current NITS Rate
Effective Dates

Future NITS Rate

Future NITS Rate
Effective Date

Allegheny Power Zone

$15,396.00/MW/Year

Since March 1, 2002

MAIT Rate for ME & PN Zones

$15,112.00/MW/Year

Since January 1, 1999

$22,612.39/MW/Year

January 1, 2017

In addition, please see FAQ GEN 00085.

GEN 00060 (revised 01/18/2017)Published On: 07/07/2015

Question: In reference to FAQ 00054, since the load data are at the generator level (including distribution and transmission losses), we would need the proper loss factors to account for AECs being charged at the retail meter level. Without the loss factors customers who are on Default Service will potentially be paying too much for this service. Based on that can you supply us with the proper loss factors or confirm the losses in Rider H of each location's tariff are the applicable distribution for these auctions?

Answer: The distribution loss factors provided in Rider H of each company's tariff are suitable to use for these auctions. The transmission loss component would need to be added to these distribution loss factors to reflect the total loss included in the loads. The transmission loss components are as follows: Met-Ed --- 0.021; Penelec --- 0.039; Penn Power --- 0.01486; and West Penn --- 0.02184.

GEN 00061 (revised 12/03/2015)Published On: 07/21/2015

Question: Is there a definitive schedule set already for future auctions?

Answer: The Calendar page of the Information Website provides the latest information on upcoming auctions.

GEN 00062 (revised 12/03/2015)Published On: 09/01/2015

Question: Can you please comment on how transfer of MET-ED & PENELEC transmission assets to Mid-Atlantic Interstate Transmission, LLC (MAIT), if approved, will affect any existing and future Default Service contracts?

Answer: As proposed in the filings made seeking approval of the transfer of assets, the transfer represents a change of control only and therefore is not expected to impact Default Service contracts.

GEN 00063 (revised 12/03/2015)Published On: 11/10/2015

Question: How much notice must a customer who is currently taking Default Service give before they can switch to a retail provider for each rate schedule?

Answer: All Pennsylvania customers may select a supplier at any time whether currently taking Default Service or already shopping. No notification is required for any customer rate type. A supplier switch is made effective within three days after the utility receives notification from a customer's selected supplier.

GEN 00064 (revised 01/18/2017)Published On: 04/21/2016

Question: Are there currently any plans for municipal aggregation in any of the First Energy Zones in Pennsylvania that will affect Default Service load for PJM planning year 2016-2017? If so, will households/businesses have to opt-in or opt-out? If so, is there a list of municipalities that have already decided to leave Default Service?

Answer: The Companies are not aware of any municipal aggregation activities in any of the
First Energy Zones in Pennsylvania that will affect Default Service load for
PJM planning years 2016–2017 and 2017-2018.

GEN 00065Published On: 08/29/2016

Question: Will the DSP-III auction and the DSP-IV auction use the same auction Website?

Answer: The DSP-III auction and the DSP-IV auction use the same Bidding Website for the actual bidding process. The Information Website also is the same for both auctions. However, the Website used to submit Part 1 and Part 2 Applications is different between DSP-III and DSP-IV: DSP-III has its own Website to submit Part 1 and Part 2 Applications, and DSP-IV has its own Website to submit Part 1 and Part 2 Applications.

GEN 00066 (revised 01/18/2017)Published On: 08/30/2016

Question: I noticed that the DSP-III Auction Calendar and DSP-IV Auction Calendar on the Information Website state different %'s of Default Service (DS) Load supplied for the same number of tranches available. For example 4 tranches of Met-Ed Residential in DSP-III was equal to 16.0% of DS Load supplied, whereas 4 tranches of Met-Ed Residential in DSP-IV is equal to 16.7% of DS Load supplied. Could you confirm that the DSP-IV Auction calendar is accurate and could you please state how many tranches of each product in each zone will be procured over the course of the DSP-IV process?

Answer: In the auction schedules on the Information Website, "% of DS Load" is the number of tranches to be procured in a particular auction (for the given company, customer class, and delivery period -- also referred to as an auction "product"), divided by the total number of tranches to be procured across all the auctions and relevant contract periods for the product (company/class/period).

For Met-Ed Residential in DSP-III, during the Default Service delivery months of June 2015 through May 2017, each day and each hour there are 25 tranches of Default Service load (and therefore 25 tranches delivered by Default Service suppliers). So 4 tranches being procured in an auction represent 16.0% of the 25 total tranches across multiple auctions and relevant contract periods for the product.

For Met-Ed Residential in DSP-IV, during the Default Service delivery months of June 2017 through May 2019, each day and each hour there will be 24 tranches of Default Service load (and therefore 24 tranches delivered by Default Service suppliers). So 4 tranches being procured in an auction represent 16.7% of the 24 total tranches across multiple auctions and relevant contract periods for the product.

The total number of tranches to be procured for a product across all auctions is "# Tranches" divided by "% of DS Load" for that product (rounding that ratio to the nearest integer), which are both shown in the auction schedule.

GEN 00067Published On: 09/14/2016

Question: Will the products in the October 2016 DSP-III auction be combined with the October 2016 DSP-IV auction resulting in a greater number of tranches available overall and therefore a larger load cap, or will they be treated separately?

Answer: The DSP-III auction and the DSP-IV auction are separate auctions. Each of the two auctions will have its own products, tranche target, and load cap. The mechanics of bidding in the two auctions will take place concurrently, using the same Bidding Website. This is analogous to DSP auctions involving residential and commercial products (referred to as the fixed-price or FP auction) and industrial products (referred to as the hourly-priced or HP auction) -- the FP auction and HP auction are two separate auctions, although bidding takes place concurrently.

GEN 00068Published On: 09/14/2016

Question: Do participants in previous DSP-III auctions in 2016 need to submit a new Part 1 Application to participate in the DSP-IV auction in October 2016?

Answer: All prospective bidders for the October 2016 DSP-IV auction must submit a new Part 1 Application for that DSP-IV auction. It is the first DSP-IV auction of 2016. The bidder application process for DSP-IV auctions is separate from the bidder application process for DSP-III auctions. Qualified Bidders from DSP-III auctions in 2016 who would like to participate in the DSP-IV auction in October 2016 must submit a new Part 1 Application for that DSP-IV auction.

GEN 00069Published On: 09/14/2016

Question: If there are changes to the NITs rates after the auction has cleared, will suppliers be made whole for any changes?

Answer: No. As per the Supplier Master Agreement definition of Default Service Supply, or "DS Supply", on page 5, the suppliers are responsible for transmission services including NITS. Any changes to the NITS rates are the responsibility of the Default Service Supplier.

GEN 00070 (revised 10/20/2017)Published On: 09/27/2016

Question: With Met-Ed and Penelec joining Mid-Atlantic Interstate Transmission LLC, (MAIT), can you estimate the impact to the NITs rate?

Answer:

NITS Rates

NITS Rate Effective Date

NITS Rates

MAIT Rate for ME & PN Zones

January 1, 2017

$22,612.39/MW/Year

Current ME & PN Zones

January 1, 1999 - December 31, 2016

$15,112.00/MW/Year

On October 28, 2016, Met-Ed and Penelec filed forward-looking formula rates with the Federal Energy Regulatory Commission (FERC), Docket # ER17-211-000, to better support efforts to modernize the regional transmission grid and enhance service reliability for customers. The rates, if approved, would increase as reflected in the chart above.

In addition, please see FAQ GEN 00085.

GEN 00071 (revised 10/18/2016)Published On: 10/05/2016

Question: In reference to FAQ GEN 00070, if MAIT does not have an estimate of the impact on NITs rates, can you give a directional impact? Can you at least provide some insight as to whether you expect NITs rates to go up or down with a new NITs rate filing? When Penn Power joined American Transmission System, Incorporated (“ATSI”), the rates went up. Do you expect the same to happen to Met-Ed and Penelec NITs rates?

Answer: Met-Ed and Penelec are not able to speculate on the direction or financial impact of any future NITS rate filings associated with the transfer of transmission assets to Mid-Atlantic Interstate Transmission LLC (MAIT). Such information will be available after a filing is made at FERC.

GEN 00072Published On: 10/12/2016

Question: Due to miscalculation of non-solar Tier I requirements in the past years, the PA PUC is issuing a tentative order to procure those shortfalls in the future. As a result, if the PA PUC adjusts the Renewable Portfolio Standards (RPS) in the future to compensate for those shortfalls, will current Default Service suppliers bear the additional cost?

Answer: In a July 8, 2016, Secretarial Letter, the Commission provided notification to all electric generation suppliers (EGSs) and electric distribution companies (EDCs) that the Commission had become aware of an error in how the non-solar Tier I quarterly adjustments were calculated over the previous six years. The Secretarial Letter also noted that the error had been corrected for the 2016 reporting period, resulting in an approximate seven percent increase in the otherwise anticipated annual non-solar Tier I obligations. For the 2016 reporting period (June 1, 2015 through May 31, 2016), the FirstEnergy Pennsylvania utilities have purchased and plan to retire the additional Tier I renewable energy credits (RECs) that were noticed by the Secretarial Letter. For all future reporting periods, the Default Service Supplier will be responsible for any subsequent increases in Tier I requirements under 66 Pa.C.S. § 2814 in accordance with the terms of the Default Service Supplier Master Agreement.

GEN 00073Published On: 10/18/2016

Question: What RPS percentages will be required throughout the various deal terms for serving load in FE-PA territories given the uncertainty left by the PA PUC about ongoing renewables obligations (and revisions for existing load)?

Answer: Please refer to the definition of Alternative Energy Portfolio Standards and Appendix E of the DSP-IV Default Service Supplier Master Agreement. Please note that the Tier I requirement may increase from the stated percentage in Appendix E on a quarterly basis consistent with 66 Pa.C.S. § 2814.

GEN 00074 (revised 10/18/2016)Published On: 10/18/2016

Question: In FAQ GEN 00069, you note that the NITS costs will be the responsibility of the Default Service Supplier. On their public website, FirstEnergy describes their major initiative:
Energizing the Future – “a long-term transmission initiative that involves upgrading and strengthening the grid to meet the future demands of our customers and communities. Three key factors are driving this $4.2 billion investment in our transmission system from 2014 through 2017.” (https://www.firstenergycorp.com/about/transmission_projects.html)
Further, in their 06/19/2015 SEC Filling, FE states that it “has identified $15 billion in incremental opportunities for reliability enhancement across its 24,000 mile transmission system.” (http://investors.firstenergycorp.com/Cache/30034104.pdf)
In other press releases related to the MAIT subsidiary referenced in FAQ GEN 00070, FirstEnergy spokesman Doug Colafella is cited stating that “FirstEnergy expects to invest $2.5 billion to $3 billion over the next five to 10 years on upgrades in the JCP&L, Met-Ed and Penelec zones.” (https://www.rtoinsider.com/firstenergy-transmission-spinoff-mait-16251/)
Can FE provide any guidance, absent a public FERC filling, on how these very sizable investments will impact the Future NITS Rates for the term of the procurement?
Is there any publicly available information regarding the measures taken to implement the stated investments, what are the current projects in the PJM cue, what are the projects currently being worked on, etc.?

Question: My counterparty Risk group is assessing credit and was wondering if you would be able to provide Met-Ed’s most recent YE audited financials, as well as their most recent quarterly financials?

Answer: The financials are available at www.firstenergycorp.com. Once at the Website, they are available under Investors / Fixed Income Investors / Financial Information (non-SEC registrants).

GEN 00076 (revised 10/18/2016)Published On: 10/18/2016

Question: Please provide any available details of capital expenditures for transmission projects that are expected to go into service in the next three years that are relevant to Metropolitan Edison Company and Pennsylvania Electric Company.

Question: Please provide a listing of the of the transmission projects that are expected to go into service in the next three years that are relevant to Metropolitan Edison Company and Pennsylvania Electric Company.

Question: On what date were NITS charges for Pennsylvania Power Company converted to a formula based rate from a fixed rate?

Answer: ATSI changed from a fixed rate to a formula based rate on 02/01/2005. The formula rate was adjusted on 06/01/2011 when ATSI joined PJM and most recently on 01/01/2015.

GEN 00079 (revised 11/21/2016)Published On: 10/19/2016

Question: Please explain the increases in Pennsylvania Power Company’s NITS charges in 2015 and 2016. In particular, what components of the formula-based calculations for the NITS charges contributed to the increases and what was the magnitude of the increases?

Answer: Pennsylvania Power Company is a transmission customer of American Transmission Systems, Incorporated (ATSI). The ATSI formula rate for 2015 was affected by the following two modifications to ATSI’s FERC-approved formula rate template:

The test year was modified from a historical period to a forward-looking period.

The transmission rate design was modified from a duel voltage or two-rate mechanism to a single-rate mechanism for all transmission customers operating in the ATSI Zone.

The underlying inputs to the ATSI formula rate filings are available publicly in FERC dockets ER11-3508 and ER15-303 respectively.

GEN 00080Published On: 10/19/2016

Question: Please explain the difference between how Network Integration Transmission Services (NITS) charges (rates) are currently calculated for Metropolitan Edison Company and Pennsylvania Electric Company and the manner in which they will be calculated under a formula based methodology.

Answer: The transmission revenue rate for Met-Ed and Penelec (Companies) is a fixed rate that was developed pursuant to a black box settlement and approved by FERC in 1998. It has not changed in nearly 20 years. The Companies have received approval from the PA Public Utilities Commission to transfer the transmission assets of Met-Ed and Penelec to Mid-Atlantic Interstate Transmission LLC (MAIT). MAIT will file an application under Section 205 of the Federal Power Act seeking Federal Energy Regulatory Commission (FERC) authorization of a forward-looking formula rate structure for transmission service, including NITS, over both the existing transmission assets (i.e., the transmission assets that MAIT acquires from the Companies under the proposed transfer) and the transmission assets that MAIT develops and owns in the future. MAIT’s formula rate will differ from the current fixed (stated) rate in that: (i) MAIT will annually update its transmission revenue requirement and resulting rate, and (ii) the Companies’ current stated rate was calculated based upon the combined transmission revenue requirements of the Companies and Jersey Central Power & Light Company. The final determination of MAIT’s rate formula is subject to FERC approval.

GEN 00081Published On: 11/03/2016

Question: Is there a deadline to submit comments on the pre-bid letter of credit?

Answer: Any proposed changes to Credit Documents must be submitted by the Part 1 Application deadline. For more information, refer to Appendix C of the Part 1 Application.

GEN 00082 (revised 11/21/2016)Published On: 11/21/2016

Question: Are auction revenue rights (ARRs) for PJM delivery year 2016-2017 allocated to Default Service Suppliers, and if so, how are they allocated?

Question: Can you provide the tranche sizes for West Penn Power for Residential and Commercial and Penn Power Residential and Commercial for 1 tranche? What is the percentage of Default Service load for just 1 tranche for each of those products?

Answer: The approximate MW-per-tranche sizes and the values for the percentage of Default Service load are posted on the News page of the Information Website at www.fepaauction.com/News.aspx.

GEN 00085 (revised 01/18/2017)Published On: 12/06/2016

Question: What are the 2017 NITS rates for Met-Ed, Penelec, Penn Power, and West Penn Power?

Question: On the Web page at http://www.fepaauction.com/Documents/NITSRateInformation.aspx, the NITS rate for Allegheny Power Zone is shown as $15,396.00/MW/year, which is equivalent to $42.18/MW/day assuming 365 days per year. But in FAQ GEN 00023, West Penn Power's NITS rate is shown as $49.027397/MW/day assuming 365 days per year. (This rate is also equivalent to the $17,895 MW/year on the PJM Website.) Could you please indicate which one is the current rate for West Penn Power?

Question: Is there a tranche fee for FirstEnergy tranches? If not, how does the consulting companies conducting the auctions get paid for their services?

Answer: There is no tranche fee paid by bidders in the auctions. The Auction Manager is paid by submitting invoices to FirstEnergy for its services.

GEN 00088 (revised 01/18/2017)Published On: 12/06/2016

Question: Can you give us all historical dates when Commercial customers were moved into Industrial depending on their demand level for Met-Ed, Penelec, Penn Power, and West Penn Power? For example, on June 1, 2015, West Penn Power Commercial was redefined to exclude interval customers with demands of 400-500 kW. What are all the historical dates when Commercial was redefined?

Answer: Met-Ed / Penelec
January 1, 2011 to current: HPS created to include GS-Large, GP, and LP

Penn Power
January 1, 2007: Hourly Pricing (HPS) becomes effective, including GP and GT
June 1, 2008 to current: Special Rule GSDS added to HPS

West Penn Power
January 1, 2011: HPS created to include Rate Schedules 30-large, 40, 41, 44, 46, 86, and PSU
May 3, 2015 to current: HPS changed to include RS 35, 40, 44, 46, and PSU

GEN 00089 (revised 01/18/2017)Published On: 12/16/2016

Question: Was Docket No. ER17-211-000 approved by FERC? It pertains to the NITS rate effective 1/1/2017 for Met-Ed.

Answer: Bidders should consult their tax advisors regarding the applicability of the Pennsylvania Gross Receipts tax.

GEN 00092Published On: 01/18/2017

Question: Do you know of any municipal aggregation that could happen in West Penn Power, Penn Power, Penelec, or Met-Ed?

Answer: Refer to FAQ GEN 00064.

GEN 00093 (revised 01/20/2017)Published On: 01/20/2017

Question: Are there any plans for ATSI or APS to increase their transmission rate in 2018?

Answer: Please see FAQ GEN 00071.

GEN 00094Published On: 03/27/2017

Question: We understand that on March 10, 2017, FERC approved the MAIT NITs rate effective July 1, 2017 for MetEd and Penelec. Can you quantify the impact of this?

Answer:

FERC stated the following on March 10, 2017: "MAIT’s proposed Tariff revisions are accepted for filing, suspended for the maximum five-month period, to become effective July 1, 2017, subject to refund, and set for hearing and settlement judge procedures." Therefore, subject to any subsequent FERC action including but not limited to settlement, PJM will begin billing the proposed rates as filed by MAIT effective July 1, 2017. The proposed rates and their impact are shown in FAQs GEN 00059 and GEN 00070. These billings will be subject to refund as FERC stated. A PJM invoice for transmission service rendered in July 2017 would be received by transmission customers in August 2017 per the normal course of PJM business.

GEN 00095Published On: 04/04/2017

Question: Are there any proposals, filings, or anticipated changes to the NITS rate for the AP Zone? If so, could you please provide the Docket Number or any other supporting documentation?

Question: If an Applicant’s intent is to provide a Pre-Bid Letter of Credit for the Pre-Bid Security, and the Applicant (1) does not provide financial statements of its own, (2) provides financial statements for its Parent company, but (3) does not rely on the Parent company for a guarantee, will the Applicant be considered a Qualified Bidder?

Answer: If the Applicant is relying on the financial standing of a Parent company, and the Parent company is not listed as a Guarantor in the Part 1 Application, the Applicant will not be declared a Qualified Bidder for the auction. If the Applicant is relying on the financial standing of a Parent company, and the Parent company is used as a Guarantor in the Part 1 Application, the Applicant may be declared a Qualified Bidder for the auction. However, the Guarantor must agree to guarantee the Winning Bidder’s financial obligations under the Supplier Master Agreement if the Applicant becomes a Winning Bidder in the auction. More information is provided in the Supplier Master Agreement posted at http://www.fepaauction.com/Documents/SupplierDocuments.aspx.

GEN 00097Published On: 08/22/2017

Question: I am interested in finding the load auction calendars for FirstEnergy Pennsylvania.

Answer: The timeline for the next DSP-IV Default Service Program auction is posted at http://www.fepaauction.com/Calendar.aspx. Under the "Here" link on the same Web page, you can also find the schedule for all auctions in FirstEnergy's Pennsylvania Default Service Program DSP-IV.

GEN 00098Published On: 10/10/2017

Question: The current auctions are for the Companies' DSP-IV Default Service Program. What is the timeline for the process for the next Default Service Program, DSP-V?

Answer: As per the Companies’ DSP-IV settlement agreement approved by the PaPUC at Docket Nos. P-2015-2511333; P-2015-2511351; P-015-2511355; and P-2015-2511356, the current program is scheduled to continue without change through May 31, 2019. Whether the program will continue for the following two-year period (June 1, 2019 through May 31, 2021) and, if so, the details of that continuation are one of several subjects scheduled to be discussed at a collaborative between the parties to the settlement to be hosted by the Companies in October 2017, and will be addressed in a filing containing the Companies' proposals on this and other topics to be made by the Companies no later than January 31, 2018 per the terms of that settlement.

GEN 00099Published On: 10/20/2017

Question: I saw that the 3-month West Penn Power Commercial tranche size is 5.26% (26.3%/5) and that the 12-month West Penn Power Commercial tranche size is 5.25% (10.5%/2). Are they supposed to be the same?

Answer: The apparent difference in the West Penn Power Commercial tranche sizes is due to rounding. For the delivery period covered by the 3-month product, 19 tranches over multiple auctions are being procured. Of those 19 tranches, 5 tranches are being procured in the October 2017 auction. Each tranche represents 1/19 or 5.26%. For the delivery period covered by the 12-month product, it also is the case that 19 tranches over multiple auctions are being procured. Of those 19 tranches, 2 tranches are being procured in the October 2017 auction. Each tranche represents 1/19 or 5.26%. The 10.5% cited in the question actually (more precisely) is 2/19 = 10.526% and 10.526%/2 = 5.26%.

GEN 00100 (revised 10/24/2017)Published On: 10/23/2017

Question: Will the NITS rates for MetEd/Penelec under MAIT be increasing on 1/1/2018 as projected on the PJM Website at http://www.pjm.com/markets-and-operations/billing-settlements-and-credit/formula-rates.aspx? If so, by how much?

Question: The response to FAQ GEN 00014 was revised on 9/21/16 and then the answer to FAQ GEN 00090 published on 1/10/2017 was directed to the response for FAQ GEN 00014. The response for FAQ GEN 00014 specifies the number of Solar and Tier I Alternative Energy Credits (AECs) to be allocated to Default Service Suppliers for West Penn Power load for DSP-IV. Can you confirm that those same amounts apply to the October 2017 procurement and all future procurements under DSP-IV?

Answer: Yes. The DSP-IV table in FAQ GEN 00014 represents the annual Solar and Tier I Alternative Energy Credits (AECs) per tranche allocated to the winning suppliers for each auction in DSP-IV. Since the table represents annual allocations, a supplier that wins a Commercial 3-month tranche will receive 3 SPAECs and 242 Tier I AECs, which are 25% of the annual total, respectively. A supplier that wins a 24-month tranche will receive that same annual allotment of SPAECs and Tier I AECs each year.

GEN 00103Published On: 10/26/2017

Question: Are there any seasonal scaling factors which impact the auction clearing prices paid by the EDCs to suppliers?

Question: Could you post a list (or point to the location of one) detailing how many total tranches are available for each Company/Product so that potential suppliers can accurately calculate the exact tranche size for the October 2017 Auction?

Question: Can the FEPA companies provide an update to the table given in response to question FAQ GEN 00022 (the number of currently deployed smart meters throughout their respective territories)?

Answer: As of June 1, 2017, approximately 1,058,000 meters along with related infrastructure have been deployed. The previous number of smart meters reported in FAQ GEN 00022 for Penn Power was overstated. The correct number smart meters deployed by company is as follows:

Meters (000)

Met-Ed

259

Penelec

426

Penn Power

167

West Penn Power

206

Total

1,058

GEN 00107 (revised 01/08/2018)Published On: 01/08/2018

Question: If each tranche is a % of customer class, what is the relevance of the 50MW tranche size (or 49.33MW or 49.79MW etc)?

Answer: A tranche represents a fixed percentage of a company’s class load. This percentage can be calculated from the information provided under the 'Here' link on www.fepaauction.com/Calendar.aspx or from the relevant news items on www.fepaauction.com/News.aspx. The MW-per-tranche measure is only an estimate of what the actual MW tranche size will turn out to be during the delivery period. For example, for Penn Power Commercial products in the January 2018 auction, one tranche represents 14.3% of the load and the tranche size is estimated to be 45.84 MW/tranche.

GEN 00108Published On: 01/17/2018

Question: Based on FAQ GEN 00107, if I apply 14.3% to the historical non-shopped Commercial Penn Power load from Mar 1, 2017-May 2017, shouldn't this provide an estimate of the MW/tranche? This logic results in a tranche size of 6MW though. Am I not applying the 14.3% to the correct load parameter?

Answer: MW/tranche is calculated using the Peak Load Contribution (PLC) Daily Zonal Scaling Factor (DZSF) times the Shopped and Non-Shopped Capacity Peak Load Share (PLS) by Class and dividing that number by the relevant number of tranches. For example, using the data from the Load and Other Data section for Met-Ed Residential on 1/1/18:

Question: Once established as a load serving entity (LSE) in PJM, are there any Pennsylvania PUC regulatory approvals required to provide Default Service Supply in these auctions?

Answer: Pennsylvania PUC regulatory approvals are not required to participate in the auctions. Default Service suppliers must meet the requirements as stated in the Companies’ Bidding Rules, the Part I and Part II Applications, and the Supplier Master Agreement (SMA). After each auction, the Pennsylvania PUC reviews and approves the auction results.

GEN 00110Published On: 01/24/2018

Question: When is AEPS compliance required by? Is there a window after delivery so that actual volumes are known?

Answer: In PA, Alternative Energy Portfolio Standards (AEPS) compliance is due September 1. The compliance reporting year runs June 1 through May 31. Actual volumes typically are available by mid to late July.

GEN 00111Published On: 04/05/2018

Question: Is it possible to update the table from FAQ GEN 00106 with the latest available data?

Answer: The table below shows the number of smart meters deployed as of March 30, 2018.

Meters (000)

Met-Ed

349

Penelec

532

Penn Power

168

West Penn Power

467

Total

1,516

GEN 00112Published On: 04/05/2018

Question: Can you please update FAQ GEN 00014 with the allocation of AECs for West Penn Power for the upcoming bid?

Answer: The table in FAQ GEN 00014 shows the allocated values for each auction in DSP-IV.

GEN 00113Published On: 04/06/2018

Question: Has the NITS/MAIT settlement agreement been approved by FERC? Is there an expected timeline for FERC’s approval of the settlement agreement if not approved? Are there any known modifications to the settlement agreement since October 13, 2017?

Answer: No modifications have been made to the MAIT uncontested settlement agreement that was filed on October 13, 2017. FERC has not acted on the MAIT uncontested settlement agreement. There is no expected timeline on when FERC may act.

GEN 00114Published On: 04/06/2018

Question: Can you provide an update to the NITS/MAIT rate information (http://www.fepaauction.com/Documents/NITSRateInformation.aspx)?

Answer: There are no updates. No modifications have been made to the MAIT uncontested settlement agreement that was filed on October 13, 2017. FERC has not acted on the MAIT uncontested settlement agreement. There is no expected timeline on when FERC may act.

GEN 00115Published On: 06/21/2018

Question: The 2018 MetEd/Penelec (Mid-Atlantic Interstate Transmission, LLC) NITS rate of $26,069.39/MW-year was calculated using an assumption that the Federal income tax rate was 35%. Given that the Federal income tax rate was lowered to 21% starting on January 1, 2018, will MetEd/Penelec revise its NITS rate prior to January 1, 2019 in order to lower its revenue requirement or will MetEd/Penelec revise its NITS rate effective January 1, 2019 and reflect the over-collection of revenues as a credit in the true up calculation?

Answer: MAIT will follow guidance provided by FERC regarding treatment of the tax reform change in the Federal income tax rate with respect to transmission formula rates in which the Federal income tax rate is an input in the overall formula that is used to establish the NITS rate. With respect to calendar 2018, MAIT will revise the Federal income tax rate to 21% for its 2018 Actual Transmission Revenue Requirement and related true-up. The true-up for calendar 2018 will be included as an adjustment to the 2020 Projected Transmission Revenue Requirement and thus returned to customers over calendar 2020. With respect to calendar 2019, MAIT will revise the Federal income rate to 21% for its 2019 Projected Transmission Revenue Requirement for rates effective January 1, 2019.

GEN 00116Published On: 09/26/2018

Question: What are the differences between the DSP-IV and DSP-V Default Service Programs?

Answer:

Changes from DSP-IV to DSP-V are limited to appendices of the Supplier Master Agreement (SMA) and are outlined as follows:

Appendix C - DS Supply Specifications:

- Default service customer groups have been updated to reflect new commercial class rate schedules accompanying the move to hourly pricing

Question: Can you describe how a customer is assigned to the PTC or HP class? Is there a demand-based allocation, does a customer select the class, or is there another process?

Answer: Currently those on the GS Medium rate schedule take Default Service via the Price to Compare (PTC) Default Service Rate Rider, but have the option to take Default Service through the Hourly Pricing Default Service Rider. Effective June 1, 2019, the same criteria will apply except that GS Medium customers (Penelec, MetEd, and Penn Power) and Rate 30 customers (West Penn) who have registered demand of 100 kW or greater for 12 consecutive months ending March 31 will be required to take Default Service through the Hourly Pricing Default Service Rider.

GEN 00118Published On: 10/17/2018

Question: Did the tranche sizes change between DSP-IV and DSP-V? For example, it looks like Met-Ed Residential for DSP-V is 4%, while in DSP-IV it was 4.167%

Answer: Tranche sizes are intended to approximate 50 MW per tranche for fixed-price products and 100 MW per tranche for hourly-priced products. The number of tranches needs to be an integer and that number is allocated across the scheduled auctions (and therefore the number of tranches for a product for a given delivery period may vary slightly from auction to auction). For example, given the PLC load estimated for DSP-IV, it was determined that 24 tranches in total would be procured across auctions for Met-Ed Residential that include the delivery period of June 2017 through May 2018. Thus, each tranche represents 1/24, or 4.167%, of the estimated load during that delivery period. For DSP-V, given the PLC load estimated for DSP-V, it was determined that 25 tranches in total would be procured across auctions for Met-Ed Residential that include the delivery period of June 2019 through May 2020. Thus, each tranche represents 1/25, or 4.00%, of the estimated load for that delivery period.

GEN 00119Published On: 10/24/2018

Question: Can you provide an update to question GEN 00014 for DSP-V?

Answer: FAQ GEN 00013 explains the allocation of AECs for West Penn Power. The table below provides more details on how 1,000 Solar Photovoltaic Alternative Energy Credits (SPAECs) and 75,000 Tier I AECs per year are allocated to Default Service Suppliers by customer class:

GEN 00120Published On: 10/24/2018

Question: Is it possible to update the table from FAQ GEN 00111 with the latest available data?

Answer: The table below shows the number of smart meters deployed as of June 30, 2018.

GEN 00121Published On: 12/05/2018

Question: Regarding FAQ GEN 00014, can you please advise if what’s listed for DSP-IV is still accurate for the most recent auction contract period? Also, is there a chart for DSP-V?

Answer: The DSP-IV table in FAQ GEN 00014 is still valid. Please note that FAQ GEN 00119 contains this table again along with the relevant table for DSP-V.

GEN 00122Published On: 01/14/2019

Question: In the answer to question GEN 00117 the term "registered demand" is used. How is registered demand of a customer defined and determined?

Answer: Registered demand is the measured demand (metered kW) for the billing month. Demand is measured over 15-minute intervals. More information on demand determination can found in the Companies’ tariffs.

GEN 00123Published On: 01/16/2019

Question: The APS transmission rates posted are lower than what was known in the previous auctions. What changed? Can you send reference documents to understand the changes.

Answer: On March 15, 2018, the Federal Energy Regulatory Commission (FERC) issued a Stated Rate Order to Show Cause to public utilities that use a stated transmission rate under an open access transmission tariff to address the effects of the Tax Cuts and Jobs Act of 2017 reduction in the federal corporate income tax rate from 35 percent to 21 percent. On November 15, 2018, in FERC docket number ER18-1595-000, the FERC approved the APS rate change (with effective rates retroactive to March 21, 2018) associated with the reduction in the federal corporate income tax rate from 35 percent to 21 percent. For more information, please see the filing and additional information posted on the FERC Website pertaining to Docket No. ER18-1595-000.